Rietz Touts Accuracy of IEM

November 3, 2004 | Slate

The exit polls were way off. The pre-election opinion polls weren't much better. But how did the markets do at predicting the outcome Tuesday night? The Iowa Electronic Markets, which has been around at the University of Iowa since 1988, offer winner-takes-all contracts, which pay off $1 if your candidate wins and nothing if he loses, as well as contracts on the percentage of the national two-party vote share. (IEM limits investors to $500 in wagers.) THOMAS RIETZ, a University of Iowa professor and an IEM director, said this summer that a comparison of 596 opinion polls with Iowa's presidential futures prices at the time the polls were taken shows that the futures prices were closer to the actual result 76 percent of the time.